If you happen to be a forex currency trading beginner, it's not a good idea to rush in and start trading with real money. You first have to do some groundwork, otherwise the consequences can be disastrous. Rather, take the time to prepare yourself thoroughly for the trading world and you will double your chances of becoming a successful trader.
To start off with, you should get your hands on a decent trading course. It doesn't matter whether this is printed, on CD or on the Internet. An online search will present you with an array of choices. You can also learn valuable tips and tricks on the trading forums.
Spend some time studying the course. Ensure that you are familiar with what a technical indicator and a fundamental indicator is. Study how to apply the various trading indicators when you are trading. It's highly unlikely you will ever become a successful trader without the use of at least one indicator to help you.
Next, a forex currency trading beginner has to study how to use and interpret charts. There's an array of charts out there, varying from line charts to candlesticks and from bar charts to point charts. What's important here is that you should be able to interpret what a chart is telling you at a glance.
Another aspect you have to familiarize yourself with is how to use trading systems. A trading system is nothing but a set of rules you draw up to prevent you from making emotional decisions. It tells you when you should enter a trade, when you should exit, how much money you are allowed to risk on a single trade, how many trades you are allowed to have open at any given stage and many similar things.
Before you start trading, you should also decide which currencies you are going to trade. Do not attempt to become a master of all currencies. Select 1 or 2 currency pairs and watch the way they interact over a period of time. For example, you could choose the USD/Euro and the USD/JPY. As time passes, you will become very familiar with that particular currency pair.
At this stage, you will probably be ready to sign up for a demo account at one of the online brokers. This gives you the perfect chance to put your theoretical knowledge to practical use. With a demo, everything is exactly the same as when you do a real trade, except you're not trading with actual money. Trade with the demo account for some time until you are making consistent profits. A forex currency trading beginner should never risk real money before he can make money consistently on the demo.
